26 June 2023

Survey from ACC and Major, Lindsey & Africa Shows that Median Total Legal Spend Increased

The Association of Corporate Counsel (ACC) and Major, Lindsey & Africa (MLA) have today announced the release of their industry-leading annual legal benchmarking survey. The fourth report as a result of this partnership found that total legal spend for all companies increased from $2.4 million last year to $3.1 million this year, with the largest increases driven by companies with greater than $20 billion in revenue.  Additionally, while more CLOs continue to oversee compliance (either directly or as part of a separate department), privacy was now ranked the most common business function directly overseen by Legal. The executive summary provides high-level survey results on legal department staffing & structure, work allocation, law firm & ALSPs usage, spending, and diversity metrics.

“The ACC/MLA Law Department Management Benchmarking Report provides critical data law departments need to progress, adapt, and improve efficiencies.” said Veta T. Richardson, president & CEO of ACC. “To adapt to today’s rapidly changing business and legal environment, this report delivers law department leaders with specific, actionable information to identify and implement improvements in every area of the legal department, including work allocation, internal vs. external spend, and so much more.”

”Over the past year, we’ve seen first hand how the legal department has continued to grow in prominence and responsibility within many organizations,” said Barret Avigdor, Executive Director of In-House Counsel Recruiting and Advisory Services with Major, Lindsey & Africa. “This report further illustrates this sentiment and speaks to the increased scope of issues that legal departments tasked with managing, including compliance, risk, and privacy.”

“Privacy” Makes Jump in Most Common Business Function Overseen by Legal

After a six-point increase since 2022, privacy was ranked the most common business function directly overseen by Legal at 57 percent of respondents, overtaking compliance which traditionally tops the list (56 percent). That said, an additional 19 percent of departments reported that compliance is a separate department that reports to Legal. Therefore, in total, 77 percent of legal departments reported that the CLO ultimately oversees compliance compared to 70 percent that have oversight over privacy. The rise of privacy in the rankings is further evidence of the importance and focus being placed on this business function across small and large companies.

Total Legal Spend Increased

Total legal spend across participating companies increased from $2.4 million last year to $3.1 million this year. Although this increase occurred across companies of all sizes, the largest increases were driven by companies with greater than $20 billion in revenue.

Total Legal spend as a percentage of company revenue also increased to 0.63 percent compared to 0.56 percent last year. However, the total inside/outside spend distribution has remained roughly the same with 53 percent of total spend going to internal costs and 47 percent of total spend being allocated to outside costs.

Despite DEI Focus, Legal Departments Report Little Change

Approximately three in 10 legal departments reported that they track internal diversity metrics related to the legal department’s composition, and 21 percent report tracking diversity metrics with respect to their outside counsel. There has been little movement in these numbers over the past three years, despite the increased attention and desire to establish a more inclusive and equitable environment within the legal profession.

Using data from this survey, ACC and MLA offer custom benchmarking reports, providing organizations a true comparison to their peer group based on six criteria. To help put this data into action, MLA’s Advisory Services consultants provide customized solutions in organizational and operational design as well as strategic learning development.  Companies can also obtain guidance through the ACC partnership with Smarter Law to highlight specific areas and actions legal departments can take to help reduce costs and improve efficiency.

Findings are based on responses from 449 legal departments in organizations spanning 24 industries, 20 countries, and all company sizes.

The executive summary is available to everyone contains a high-level overview of the survey results and key trends compared to the 2022 edition of the survey. Full survey results - broken down further by company revenue, industry, legal department size, and company type — are available for purchase on ACC’s website.

Copyright © The Impact Lawyers. All rights reserved. This information or any part of it may not be copied or disseminated in any way or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of The Impact Lawyers. The opinions expressed in this article are those of the authors and do not necessarily reflect the positions or policies of The Impact Lawyers.

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